How To Get A Commercial Bridging Loan For Your Business

Through our online chat service on the Clifton Private Finance website, we receive enquires in relation to commercial bridging loans. A snapshot of the most frequently asked questions can be found below, along with some important information for those who need commercial finance.

Commercial Bridging Finance

Question: So, what exactly is a commercial bridging loan?

Answer: Quite simply a commercial bridging loan is a loan that is designed to provide short term finance that can ‘bridge’ the gap in funding until longer term finance is in place. Providing it is used for a commercial transaction, this type of finance can be used by individuals and businesses.

Commercial bridging loans are a popular way to access short term finance for a business, as it is possible to secure substantial funding within a short space of time; this allows businesses to act quickly when time is of the essence.

Bridging Loans used for Business Growth

Question: Is it possible to use a commercial bridging loan to grow my business?

Answer: Yes. Business bridging loans are becoming an increasingly popular tool for companies to stay ahead of the curve. Whether you wish to invest in a business, develop a business owned property or need funds quickly to take advantage of an attractive opportunity, a bridging loan could be a good method to secure the finance you need.

The key consideration for the bridging lender is the exit strategy you have to pay the loan off.

Bridging Loans to Assist Cash Flow Issues

Question: Can I use commercial bridging finance when my business is strapped for cash?

Answer: Yes. The speed and convenience of commercial bridging loans can be utilised to combat the effect of cash flow issues.

There are a multitude of reasons that a business may experience cash flow issues, such as increasing monthly outgoings, failing to chase payment of invoices, providing too much credit to customers, overtrading, forgetting to prepare for seasonal demand or falling behind on VAT, PAYE or corporation tax.

If you are experiencing cash flow issues on a regular basis, then an alternative type of business finance may be more appropriate. Working capital loans are commonly used to offer businesses more financial flexibility.

Speak to a good finance broker to talk through the options.

Mixed Use

Question: What if my property is both residential and commercial? Will I still be able to use a commercial bridging loan?

Answer: Possibly. If you have a property that is used for both residential and commercial purposes, eg a restaurant that has a flat above it, you may still be able to use a commercial bridging loan. Commercial bridging loan lenders will provide the finance you need so long as more than a certain amount of the property, typically 40%, is used for commercial purposes.

Features of Commercial Bridging Loans

Question: What can a commercial bridging loan offer?

Answer: It depends. The features of a commercial bridging loan usually depend on the specific lender, which is why it is advisable to contact a professional broker to find the best deal for your set of circumstances. However, the common features of a business bridging loan are:

• Finance from £50,000 to £25 million
• Term of finance from 1 to 36 months
• Interest roll up options
• Fast turnaround, secured finance within 7 working days possible

The Advantages of a Commercial Bridging Loan

Question: Why should I use a business bridging loan? What are the key points in considering a business bridging loan?

Answer:  Firstly, bridging loans tend to be more flexible and straightforward than loans from a traditional lender. The lender will focus on the asset their money is secured on.  Both the past performance of your business and your credit rating may not be an issue when it comes to applying for business bridging finance.

Secondly, business bridging loans can offer flexible interest payments. Bridging loan lenders usually provide the option to ‘roll-up’ interest to pay at the end of the term of finance; this allows you to avoid servicing monthly interest payments and use your loan solely for your business purposes.

Finally, in order to secure a bridging loan you will need an exit plan. An exit plan is the strategy that you will use to repay the loan at the end of the term of finance. An example of this may be selling a business owned property upon completion of its development.

Bridging Loan Lenders

Question: Where can I get a commercial bridging loan?

As a specialist finance broker, Clifton Private Finance can provide a clear breakdown of the commercial bridging loans on the market; professional advice to help you weigh up the pros and cons of each financial solution; access to tailored commercial bridging loans with favourable terms and conditions, along with efficient service to ensure your business gets the finance it needs quickly.

If you need a commercial bridging loan call us today on 0117 959 5094 or complete our callback form.